NZDUSD declines the most among majors as US Dollar reverses data-led losses

Global markets remain jittery while bracing for top-tier economics from the key nations, including the US and Europe. That said, market sentiment improved notably the previous day after the US data renewed hopes of an end to hawkish monetary policies at the Fed. Also fueling the optimism were talks of more stimulus from China and likely improvement in Sino-American ties.

However, comments from the US commerce secretary and its reaction in China probed the previous risk-on mood, allowing the US Dollar to better brace for today’s slew of data surrounding inflation, employment and growth. Further, the market players also reassessed the Fed concerns and allowed the Greenback to reverse a part of the previous day’s heavy losses, the biggest in 1.5 months.

It should be noted that the US Dollar recovery joined disappointing NZ housing numbers to exert downside pressure on the NZDUSD, making it the biggest loss among the G10 currency pairs. Following that is the USDJPY pair which ignores recently hawkish BoJ concerns and regains 146.50.

Elsewhere, prices of Gold retreat but WTI renews weekly top amid mixed concerns and the firmer USD while equities in the Asia-Pacific zone edge higher.

Talking about the cryptos, BTCUSD pares the biggest daily gains since mid-March while ETHUSD also prints mild losses after rising the most since mid-July.

Following are the latest moves of the key assets:

• Brent oil renews weekly top around $85.70 at the latest.
• Gold price retreats from three-week high to $1,935 as we write.
• USD Index prints mild gains while bouncing off weekly low to 103.65 by the press time.
• Wall Street benchmarks closed in the green and helped the stocks in the Asia-Pacific zone, despite lackluster China moves. That said, equities in Europe and the UK edge higher.
• BTCUSD stays depressed at around $27,500 while ETHUSD also drops to near $1,720 by the press time.

Cautious optimism prevails but US Dollar, yields recover

Despite lacking momentum, the traders remained cautiously optimistic and tried to push the greenback, even if not favoring the bears of late. The reason could be linked to the previous day’s US data and the leading Chinese banks’ cutting of mortgage rates. Also keeping the pessimists away are the talks about soft landing and the central bankers’ inability to offer any major hawkish surprises at the Jackson Hole.

Elsewhere, Grayscale’s victory over the US SEC and hopes of getting massive ETF approvals next week propelled the BTCUSD and ETHUSD before the latest consolidation.

• Strong buy: USDCAD
• Strong sell: ETHUSD, GBPUSD, Gold
• Buy: USD Index, Nasdaq, USDJPY
• Sell: DAX, FTSE 100, BTCUSD, AUDUSD, EURUSD

Too many catalysts to offer a busy day

Be it the German inflation gauge or the US ADP Employment Change, not to forget the US PCE data and Q2 GDP, many statistics can entertain the momentum traders and may allow the US Dollar to pare the previous day’s heavy losses if confirming hawkish Fed bias. Also keeping the market players on the edge is the cautious mood ahead of Thursday’s US inflation gauge and Friday’s US NFP.

May the trading luck be with you!